And, you know, Jeffrey Frankel of Harvard put it, I thought, perfectly well. He said, "Just as there are no foxholes -- there are no atheists in a foxhole, there are no libertarians in a financial crisis."
I mean, all of the good folks who've told us "hands off, laissez-faire, no government," I don't know where they are. They've suddenly become Marcel Marceau . They've gone mute on us. You know, everybody wants Sam in there, and you can feel the irresistible wave for regulation.
Oh, hi there. I'm a libertarian ... despite this financial crisis.
And I'm a rather concerned libertarian because Shields is right. Most fiscal conservatives have shut up and the climate is ripe for new regulatory legislation. In particular, the so called "fiscal conservatives" - the ones the left paints as being fiscally conservative, like Bush and McCain, when their record proves otherwise - seem to be especially pro-new-government-intervention.
But government intervention is not the cure all for economic woes.
In the early 80s, under the Reagan administration, taxes were lowered and regulation frozen. Although not immediate, the recession that began under Carter came to a close under Reagan.
In the early 20s, another (serious but lesser known because of the 30's depression) recession came and went without Big Government intervention.
And the economic conditions of those two recessions were dramatically worse that today.
At 6.1%, unemployment is lower today than during any year in the entire twelve year range of 1975 to 1987 with the one exception of 1979 where it was only two tenths of a percent lower than today. And 1979, 1980, and 1981 all saw double-digit inflation.
Between 1919 and 1921, unemployment climbed to 11% and the Dow Jones Industrial Average fell losing nearly half it's value.
Now, new regulations would not necessarily be a bad thing. I would welcome laws requiring more transparency assuming that said laws don't add major imediments to business (like say, Sarbanes-Oxley has done). And, if Fannie Mae and Freddie Mac are regrettably here to stay, something needs to be done to change them away from a model of private profits and socialized losses.
But, it's clear that history teaches markets can correct themselves without dramatic government involvement. And it's unlikely that giving in to the temptation to try to have government rescue us from this will be in our interest in the long run.
I join the plea: Kill the Bailout.